FCA Declares £147m Fine on Credit Suisse for Due Diligence Failings
Credit Suisse was fined £147,190,200 for breaching FCA’s Principle 2 and 3 for Businesses as it failed to implement risk management measures and financial crime prevention systems.
A failure on part of Credit Suisse in due diligence led to the second-largest fine issued by the FCA. The bank arranged approximately $1.3 billion in the form of loans and bonds to allow the Republic of Mozambique to fund tuna fishing initiatives and coastal inspection.
According to the FCA, this fine was imposed for “serious financial crime due diligence failings” from 2012 to 2016 when Credit Suisse was helping the Republic of Mozambique in raising loans. As per the FCA, these loans were “tainted by corruption”.
The long-overdue “tuna bonds” case has trapped Credit Suisse and other involved entities in several civil, regulatory, and criminal cases. The detailed investigation found that payments of up to $53 million were made to three of Credit Suisse’s employees as bribes.
Additionally, significant amounts of the loan were swindled and were even used for purchasing military equipment. The bank was found to have breached Principle 3 of the FCA’s Principles for Businesses due to insufficient due diligence while arranging loans for the Republic of Mozambique.
Credit Suisse also violated Principle 2 by failing to conduct business with care, skill, and diligence. The FCA pointed out the lack of reporting to the “relevant authorities” during the final transaction period in 2016 when the bank had considerable evidence “to ground a reasonable suspicion that [an earlier loan] may have been tainted, either by corruption or other financial crime”.
The FCA fine fulfilled multi-jurisdictional obligations that involve the US Department of Justice as well as the US Securities and Exchange Commission along with the Swiss Financial Market Supervisory Authority.